ERBIL, Kurdistan Region - The US Treasury Department has lifted restrictions on a number of Iraqi currency exchange companies, allowing them to resume selling dollars to Iraqi travelers, Iraq’s Central Bank (CBI) announced Sunday, days after Washington sanctioned an Iraqi bank over alleged financial ties to Iran.
“The US Treasury Department has lifted restrictions on a number of Iraqi exchange companies after verifying their compliance with standards adopted by the Central Bank of Iraq, allowing them to resume participation in dollar sales to travelers,” the CBI said in a statement carried by the state-run Iraqi News Agency (INA).
The bank said the decision was part of efforts to strengthen regulatory compliance and ensure that foreign currency sales were conducted under approved procedures.
The CBI did not identify the companies or disclose how many had been cleared to resume dollar sales.
The announcement comes amid continued US scrutiny of Iraq’s banking sector over concerns that financial institutions have been used to facilitate illicit dollar transfers to Iran, while Baghdad seeks to strengthen compliance with international banking regulations.
On Thursday, the US Treasury Department sanctioned Iraq-based International Development Bank for Investment and Finance (IDB), accusing it of facilitating Iranian access to US dollars and maintaining ties to Iranian government entities and pro-Iran armed groups.
The Treasury alleged that IDB had abused its access to Iraq’s now-discontinued dollar wire auction and transferred profits to Iran in US dollars each month.
It also alleged that IDB had received capital from Iran’s sanctioned Bank Melli and that a financier linked to the Islamic Revolutionary Guard Corps’ (IRGC) Quds Force continued to exercise influence over the institution.
The designation was part of Washington’s Operation Economic Outcast, a US campaign launched in August targeting financial networks Washington accuses of helping Tehran circumvent sanctions and financial military activities.
Several Iraqi banks and exchange companies have faced restrictions on their access to US dollars in recent years, as the CBI implements banking reforms and strengthens oversight of foreign currency transactions.
Sunday’s announcement also coincides with the implementation of new CBI regulations governing dollar allocations to Iraqi travelers.
Under the new rules, announced Thursday, eligible travelers can obtain up to $2,000 at the official exchange rate once every two months, with a maximum of six allocations annually.
The change comes less than two weeks after Iraq devalued its currency, raising the official selling rate from 1,320 to 1,520 dinars per US dollar as the government seeks to address a widening budget deficit caused partly by disruptions to oil exports through the Strait of Hormuz.
